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Posted at 7:00 AM ET, 01/12/2011

Metro PCS rebuts accusations of net-neutrality violations

By
Cecilia Kang

Metro PCS on Tuesday rebutted accusations by consumer groups that it was violating net-neutrality rules and sent a letter to the chairman of the Federal Communications Commission promising to respond to specific allegations.

"The complaints about our new, pro-consumer, pro-competitive 4G LTE rate plans are erroneous. We continue to offer consumers a full service, unlimited data plan. We increased consumer choice by adding two new rate plans that are less expensive and enable consumers to select the service and content they want at a price point they can afford. These new rate plans comply with the FCC's new rules on open mobile Internet."

Consumer groups such as Free Press and Media Access Project wrote in a letter to the FCC that Metro PCS's tiered plans essentially provide all customers with access to certain services, such as YouTube, but make other sites, such as Netflix or Hulu, more expensive to access for customers in the most-basic tier of service. Moreover, the groups say that the Skype voice application has been blocked outright by Metro PCS, which would violate a provision of Internet access rules.

In a letter to FCC Chairman Julius Genachowski Tuesday, Metro PCS said it would make a "full and complete written response to the various assertions contained in the letter on or before February 11, 2011."

An important problem most people don't realize is that a radio channel is a limited resource. There just isn't always enough bandwidth available in a given area for everyone with a phone do whatever they want at the same time. So carriers base charging schemes and network investment on "the average" user -- and if the average is going up faster than the network can keep up with, you have a problem, as AT&T/iPhone users in big cities discovered the hard way.

So different carriers are trying different approaches -- limiting you to 1GB/mo, charging more for different tiers of service, etc. No customer is going to like anything they come up with because what they really want is to not have to think about it, "it just works", and it's a low fixed price no matter what you do.

Metro PCS's approach sounds like they might be accepting subsidy money from Youtube rather than charging the user directly for a higher tier of service. Should that be illegal? If so, should it be illegal for a TV station to take money from advertisers instead of charging you to watch their station? These are common business practices, translated to your phone. Claiming they're "net neutrality" violations, especially without more information, is naive.

And no, I don't work for Metro PCS or any other carrier. I used to work in the cellular industry and I know how expensive, and how limited, those radio networks really are. You only "think* that's a phone -- it's just a radio, and the technology it takes for you to be able to watch Youtube on it is pretty amazing. But it does have limits. Thinking you should be able to do everything you want on your phone any time you want for the same price as everyone else is like the article Jay Leno quoted on Headlines last night -- a guy complaining in a letter to the editor because the lunar eclipse happened when he was at work, and couldn't they do a better job of scheduling it... There are some basic laws of physics and economics at work in radio networks, and one of the few controls the operators have is to mess with the charging scheme to try to keep the networks from collapsing under unlimited demand. I wish them luck.

Cecilia Kang, Google's Reporter and Lobbyist at The Post, again trots out biased reporting that favors Google's corporate agenda.

The MetroPCS plan is fair. Where else can you get a plan that includes unlimited voice, plus all the data most people will need, for $40 per month?

Given the value of this plan, it's perfectly reasonable for MetroPCS to place a few constraints on the way the network is used. They are allowing the streaming of limited-duration, relatively low resolution video, but prohibiting streaming that requires more bandwidth for longer durations (which imposes a severe load on the network - especially in the case of a small provider). MetroPCS has very limited spectrum holdings and is not an ILEC, meaning that - thanks to the FCC's failure to act to prevent the ILECs from price gouging on "special access" lines - it pays 20 to 100 times more for its Internet bandwidth than an ILEC charges at retail for DSL bandwidth! In short, some restrictions on bandwidth-guzzling behavior are an absolutely reasonable tradeoff for an extremely affordable rate plan.

What's more, it can hardly be said that consumers do not have other options. MetroPCS has higher priced plans with fewer restrictions, and there are at least three competing providers in every market that MetroPCS serves. So, if consumers really do not like MetroPCS or its products, they can vote with their feet and their wallets. There's no need for government intervention in a vibrant and highly competitive market.

Finally, it does not appear that MetroPCS' rate plans violate the FCC's rules. The rules allow ISPs to engage in reasonable network management practices, and specifically state that network management which addresses congestion on the ISP's network is reasonable. What's more, no one could find it unreasonable for any provider to set its rates and terms in such a way as to ensure that it did not lose money on every customer.

I was wondering what these groups were going to do once Net Neutrality passed that everyone agreed upon. Now i know, start accusing everyone of violating them. How can more choice be a violation of Net Neutrality especially when Metro PCS has some of the cheapest unlimited plans in the business. Are these groups really looking out for consumers or their own agendas? The big question are they willing subsidize the costs for consumers if the lower plan options didn't exist. The answer is no and all they are doing with these stunts is confusing people. How is "Fair" and "Choice" not neutral?

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